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Smartphones 2010: iPhone Needs to Watch Its Back as Android Surges

The newest subscriber numbers for the smartphone sector show Apple (AAPL) treading water while Google's (GOOG) Android operating system more than doubled its market share in the last three months. The iPhone still enjoys a healthy lead, with roughly 25% of the market to Android's 7%. But Google's quick gains are clearly a cause for concern at Apple, as evidenced by the recent patent lawsuits Apple slapped on HTC, a key manufacturer of Android devices.

The key to these rapid gains is Android's open approach. Google's operating system is now available for all the major carriers on devices from the top manufacturers. As people roll over their contracts they will increasingly want smartphones, and upgrading to a device with Android is often the simplest choice. The locked in partnership of Apple and AT&T (T), by comparison, has to win converts.

This chart from Gizmodo sums things up nicely.

Apple is rumored to be planning an iPhone version 4 sometime this summer, and a fresh release could certainly sway customers. But the upgrade also highlights the speed of Android's open source approach. Since the iPhone was released in January 2007 it has seen three major system upgrades. Android managed that many upgrades in less than a year, largely because under the hood Android is just the powerful, developer friendly Linux.

This year's Mobile World Congress turned into a veritable "Android Orgy," but the brand still faces real challenges over customer service, a difficult task when fragmented across so many platforms. Still, the rapid growth of Android bodes well for Google's open approach, and will certainly keep Apple looking the rear view mirror.

Image from Flickr user Thomas Stegelmann

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